eBay slurps Hunch to match ads with shoppers

eBay has bought data-mining firm Hunch in a move to increase the effectiveness of personally targeted ads on the online auction house’s sales site.

Hutch was set up in 2009 by Chris Dixon, Tom Pinckney, and Matt Gatti, and uses a mixture of data mining and predictive modeling to build individual “Taste Graphs” of personalized suggestions for adverts. The company will continue to operate as a stand-alone unit based in New York, but will provide ad support for eBay’s marketplace in an attempt to boost revenues.

“We are engaging consumers in innovative ways and attracting top technologists to shape the future of commerce,” said eBay's chief technology officer for global products and marketplaces Mark Carges in a statement. “With Hunch, we’re adding new capabilities to personalizing the shopping experience on eBay to the individual relevant tastes and interests of our customers.”

In the last two years, Hunch has been gaining interest for its predictive algorithms that analyze customers’ online patterns and make advertising-placement suggestions based on their activities. It mines online marketplaces, social media pages, and direct questionnaires from users to build profiles. Hutch has said that all existing customers’ data is covered by its current privacy policy, and people who wish to remove their information from company servers can do so by visiting their web site.

“We were struck by the incredible opportunity to put Hunch’s Taste Graph technology to work for one of the undisputed global leaders in ecommerce,” blogged Hutch cofounder Chris Dixon. “We were equally impressed with the caliber of the people we met at eBay. They share not only our passions for creativity, innovation, and technology, but also our commitments to privacy, user respect, and data transparency.”

The purchase will hopefully revive eBay’s e-commerce portal, which has been suffering in competition with Amazon over recent years. The company is pushing for a major revamp in 2012, with an entirely new search engine (code-named Cassini) – Hunch’s engine could well be used in the new system. ®